ZSE suspends Meikles

Published: 07 June 2015

Meikles Limited (Meikles) has been suspended from the Zimbabwe Stock Exchange (ZSE) amid reports that the bourse is probing the group's financials for the year to March 2014, particularly disclosure of its Reserve Bank of Zimbabwe debt.

The suspension is with effect from February 16, 2015.

While Meikles executives were unavailable for comment, a ZSE official, who preferred anonymity, said there was concern over overstatement of the group's 16-year-old $90 million debt owed by the central bank.

"I understand Meikles has been suspended pending investigations into certain figures raised in the group's last set of results. The ZSE just wants clarifications," the official said, adding that "concern is on whether the RBZ debt was over or understated….and ZSE's stance is in the interest of investors".

This comes as Zanu PF legislator Munyaradzi Kereke had last week alleged that the Meikles debt had been overstated.

"Meikles overstated the debt it is owed by the RBZ with the intention of manipulating its price on the stock market. Meikles published completely erroneous information (whose) implications are far much more in the financial system than just the numbers," the ex-advisor to former RBZ governor Gideon Gono said.

"They created a stock exchange bubble, which is tantamount to fraud. When you artificially present falsehoods on the stock exchange you uplift the stock price or keep it where it is when in effect it was supposed to fall," he told Parliament.

Kereke said the Meikles debt stood at $34,1 million as of December 2008 and could not have ballooned to the $90 million that the group published in its 2013 and 2014 financials.

This comes as Meikles chairperson, John Moxon, last year wrote to Parliament complaining about Bulawayo South legislator, Eddie Cross, a shareholder in Meikles, for allegedly using insider information for his personal benefit, a move in contravention of Parliament rules.

In the letter written to the portfolio committee on budget, finance and economic development, the businessperson alleges that Cross, who is also a member of the committee, used knowledge gained through public hearings on the RBZ Debt Assumption Bill to influence other shareholders during Meikles' annual general meeting held in October.

According to results released by Meikles, the group was owed $87,2 million by the RBZ, which has increased to $90,8 million as a result of interest negotiations.

The debt, which has been growing since 1998 when it originated, has accrued interest since the economy was formally dollarised in February 2009.

It originated from deposits made to RBZ following Meikles' listing on both the local bourse and the London Stock Exchange in 1996 and the raising of funds from a number of substantial investors for the benefit of the company.
- dailynews